SIA's privatisation of Tiger could lead to smoother ride for both

Singapore

AT last year's annual general meeting for Tiger Airways, a shareholder described the beleaguered budget carrier as the stepdaughter who has never been allowed into the main house.

On Friday, Singapore Airlines threw its doors open in a general offer for the shares it doesn't already own in Tiger at 41 Singapore cents per share. In addition, to give investors an avenue to ride on any future growth from the group, SIA threw in an option for accepting Tiger shareholders to subscribe for SIA shares at S$11.1043 apiece. The deal values Tiger at about S$1.02 billion, and SIA plans to invest up to some S$470 million, drawing from its S$4.8 billion cash pile.

The offer price represents a 32 per cent premium over the last traded price of Tiger's shares of 31 Singapore cents on Thursday, the day before the offer was made. However, it is a far cry from Tiger's S$1.50 initial public offe…